Friday, 16 September 2016

The most predictable thing ever

The world simply will not make sense if you do not grasp the first and most basic thing you must know about economics. Which is that incentives matter.

What the incentive is, what the action or activity is, those are things which can all vary wildly. Whether something acts as an incentive or a disincentive can change too. But it really is crucial to understand that whatever else might be going on, incentives matter:

In 2004 the New Zealand government introduced legislation banning anonymous sperm donations and preventing donors from receiving any payment for their services.

Donors in New Zealand have minimal costs covered (such as travel to the clinic) but are not compensated for their time, which after rigorous medical testing and counselling, can be significant.

Under the new law, the sperm donor must also agree to being identified to any offspring when the child turns 18.

A decline in sperm donations following the introduction of the legislation coincided with a sharp rise in same-sex and single women applying for donated sperm.

It's not difficult to predict is it? On the application side the greater controls mean that fertility through donation is more desirable. On the production side the greater controls make production less desirable. Note that there's no money floating around this system but we've still got a change in demand and a change in supply.
And given that we've not got a price that can change to balance them we've got a mismatch.

The 2004 Act is here. One night stand: legal. Prostitution: legal. Providing valuable consideration for provision of a human gamete: up to a year in jail, $100k fine, or both. Bit odd that whatever benefit is provided to the donor in a motivated one-night stand doesn't count as a valuable consideration.

One of our staffers here at the Initiative, who will remain nameless unless she wishes to be named, wondered whether there might yet be a market opportunity here. Business plans welcome in the comments: bridge the gap caused by the legislation, while not doing anything illegal in the process. I can kinda think of one, but y'all go first.

Update: the Herald reports that the Minister is considering allowing in foreign sperm. I wonder if Winston is worried. More seriously, think of the mental gymnastics required to think it ok to indirectly pay foreign donors via foreign clinics, but bad to allow domestic payment? Come on, National. Learn to liberalise for once. Do you have to keep everything dumb that Aunt Helen gave us?